KUALA LUMPUR: Supermax Corporation Bhd has warned that should efforts to divert its US-bound sales to other markets "be less than successful, this would have a material adverse effect on the company's financial performance."

"The duration of the withhold release order (WRO) would also determine the extent of the adverse impact," the glovemaker said in a stock exchange filing with Bursa Malaysia today.

Supermax, however, said it does not foresee any material impact operationally.

The company announced on Oct 21, 2021 that it had been served with a WRO by the US Customs and Border Protection (US CBP) that would affect its sales to the US market, which accounts for about 20 per cent of the group's total sales.

Nevertheless, it said the group would take steps to divert goods bound for the US to other markets where possible.

The US CBP had on Oct 20, 2021 issued a WRO against Supermax Corp and its subsidiaries for alleged use of forced labour in manufacturing operations.

The US CBP identified 10 of the International Labour Organisation's (ILO) indicators of forced labour during its investigation.

Following the investigation, disposable gloves produced by Supermax's wholly-owned units Maxter Glove Manufacturing Sdn Bhd, Supermax Glove Manufacturing and Maxwell Glove Manufacturing Bhd were detained from entering all US ports of entry effective Oct 21, 2021.

-- BERNAMA